One of the governments leading small business support initiatives together with Standard bank, this week finally came up with an effective strategy with which to ease the increasing difficulty for potential entrepreneurs to obtaing loan finance.

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This article from Business Day's Thabang Mokopanele:

STANDARD Bank and Khula Enterprise announced yesterday that they had signed a new credit indemnity agreement aimed at making finance for small and medium-size enterprises more accessible.

The Khula-Standard Bank partnership is expected to assist aspiring entrepreneurs to obtain much-needed funding for their businesses.

Khula currently provides only enterprise finance of R10000-R250000 .

But its wholesale model serves merely as a guarantor, while banks provide the loans.

Khula Enterprise MD Xola Sithole said the new agreement signaled a significant turning point in small business finance as it placed high emphasis on developmental imperatives. He said vital among these was increased regional focus in favor of more rural and peri-urban entrepreneurs.

There would also be an attempt to increase the lending patterns on loans of less than R250000 to more than 50% of the total indemnity book by 2010. Among other revised conditions is that the owner’s contribution has been reduced and the qualifying loan amounts increased.

“Khula is very proud of its renewed partnership with Standard Bank as this forms part of Khula’s strategy of aligning its developmental objectives with those of its commercial partners. The signing of this agreement is not only a step in the right direction for Khula and Standard Bank, but it begins to paint a picture of a better future for the country’s entrepreneurs, who are the beneficiaries of the credit indemnity product,â€